House Dems again criticize Verizon AWS deal

House Democrats are pressuring federal regulators for the second time in a month about Verizon Wireless' marketing deals with those cable operators from which it has proposed buying AWS spectrum.

A group of 32 lawmakers yesterday sent a letter to the FCC and Justice Department (DOJ) expressing concerns that the transaction would "turn the promise of the 1996 Telecommunications Act on its head" by making "formerly energetic competitors into business partners."

Verizon's arrangements with its cable partners to cross-sell each other's products would discourage them from competing with each other on video, broadband, voice and wireless services, and it would also diminish Verizon's incentives to expand its FiOS network, the representatives said.

"The Verizon/cable transaction raises serious concerns for competition and consumers," they said in a letter led by Louise Slaughter of New York, ranking member of the House Rules Committee. "We strongly urge you to protect the public interest in cross-platform competition driving lower prices and higher-quality services."

The lawmakers did not voice concerns about the transfer of AWS licenses to Verizon, instead focusing exclusively on the companies' marketing agreements and joint venture. They did not ask the FCC and DOJ to block the deal entirely.

Verizon and three of the four cable operators in the deal have already begun selling each other's products and services in some markets, even though the FCC has not concluded its review of the spectrum portion of the transaction.

This week’s message mirrors criticisms of the deal laid out in June by a separate group of Congressional Democrats led by Ed Markey of Massachusetts, a senior member of the Energy and Commerce Committee, and Michigan's John Conyers, ranking member of the Judiciary Committee. Those lawmakers also did not request a ban on the deal but asked the FCC and DOJ to "carefully evaluate the potential impacts of Verizon's post-transaction spectrum holdings and the joint marketing agreements."

Wisconsin Democrat Senator Herb Kohl has also expressed concerns about the transaction's effect on competition.

A spokesman for Verizon dismissed the Democrats' concerns.

"Over the past six months, we have addressed these issues, made a persuasive case that bringing unused spectrum to the marketplace to serve millions of consumers is strongly in the public interest, and we believe we are on track for approval later this summer," he said.

The letter from the House Democrats was provided to the media by the Communications Workers of America, which is currently in the midst of negotiating union contracts with Verizon.

Verizon has offered to sell off some of its 700 MHz spectrum and has agreed to swap spectrum with T-Mobile USA if the government approves its $3.9 billion purchase of the nationwide block of AWS spectrum, which it plans to use in its LTE network.

Reuters said yesterday that the FCC appears to be close to approving the spectrum transaction, but the DOJ has lingering concerns about the marketing deals.